This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Oil Prices Surge on Libya Violence

(Oil prices, Libyan political crisis story updated for Tuesday trading)

NEW YORK (TheStreet) -- Oil prices surged on Tuesday with the escalation of violence in Libya, and the first tangible impact to global oil supply from the wave of political turmoil across Northern Africa and the Middle East.

Brent crude was above the $106 mark on Tuesday and U.S. crude oil futures spike from an open at $90 to above $94, reaching as high as $98 during Tuesday trading. The surge in the price of oil on Tuesday saw brent crude touch above the $108 mark. In both cases, the Tuesday spike brought the highest oil prices since the fall of 2008, and the biggest equity markets dip since last August.

In Libya, there were reports of leader Moammar Kadafi using gunships, warplanes and mercenaries against mostly unarmed political protestors. The U.N. Security Council called an emergency meeting on Tuesday.

Libya is the third-largest oil producer in Africa, and 12th-largest oil exporter globally. Libya is the first country where recent political protests across Northern Africa, from Tunisia to Egypt, has impacted oil supply. Libya accounts for roughly 1.7% of world crude output.

Reuters reported on Tuesday morning that Libya had declared force majeure on its oil exports, which would amount to roughly 1.5 million barrels per day. Force majeure is a legal clause which removes contractual liability from a party if uncontrollable events occur.

The winds of political change across Northern Africa and the Middle East have stoked fears of global oil supply disruption, and ever-higher crude prices, yet it wasn't until the Libyan situation descended into chaos that the fears became tangible in terms of oil production and oil export impact.

Take Egypt, where historic events have taken place, but in a country that is a net importer of oil. There were fears of a Suez Canal closure in Egypt, and some specific energy companies with production in Egypt were caught up in the headlines, but at least so far, the Egyptian political crisis has not been an energy sector crisis maker.

By contrast, any way the data is crunched, Libya is a much bigger deal for the global markets, starting with its roughly 1.7 million barrels of oil per day, according to the International Energy Agency (IEA), and its position as the third largest oil market in Africa.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs